US Dollar Index Rebounds, Aluminum Futures Under Pressure Overnight [SMM Aluminum Morning Brief Nov 21]

Overnight, the most-traded SHFE aluminum 2501 contract opened at 20,750 yuan/mt, reaching a high of 20,815 yuan/mt and a low of 20,645 yuan/mt, and closed at 20,675 yuan/mt, down 125 yuan/mt from the previous close, a decline of 0.6%. On Wednesday, LME aluminum opened at $2,651.5/mt, peaked at $2,692.5/mt, and closed at a low of $2,630/mt, down $15.5/mt, a drop of 0.59%.

Summary: On the macro front, the US dollar rose 0.45% overnight. Market expectations for the interest rate cut path have recently narrowed but remain volatile. According to CME's FedWatch Tool, the market sees a 52% probability of a 25 basis point interest rate cut by the US Fed at the December meeting, down from 82.5% a week ago. Recent statements by US Fed officials, including Fed Chairman Jerome Powell, indicate that the Fed will proceed slowly and cautiously on the rate cut path. Domestically, attention is on the State Council's regular policy briefing by the State Council Information Office tomorrow, which will introduce measures to promote stable growth in foreign trade. On the fundamentals side, domestic aluminum remains stable, with alumina prices continuing to rise, maintaining cost side pressure. On the demand side, shipments from Xinjiang show signs of further improvement, and concentrated arrivals are expected in Gongyi and Wuxi regions in the short term. The inventory turning point may appear as early as next week. Additionally, observe the impact of downstream "rush exports" on outflows from warehouses before the official implementation of the aluminum semis export tax rebate cancellation. Overall, the US Fed remains cautious on the rate cut path on the macro front, while alumina costs continue to rise on the fundamentals side. The high costs and low inventory of aluminum persist, leading to short-term aluminum prices mainly fluctuating and consolidating.